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Managerial Delegation under Alternative Unionization Structures

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  • Luciano Fanti

    () (Department of Economics, University of Pisa, Italy)

  • Nicola Meccheri

    () (Department of Economics, University of Pisa, Italy)

Abstract

This paper studies a three-stage duopoly game with managerial delegation and (monopoly) unions that can be either decentralized or industry-wide. Main findings point out the opposite role played by the introduction of managerial delegation according to the different nature of unionization structure. Indeed, while under industry-wide union managerial delegation leads to incentives for sales, lower profits and higher consumer surplus as well as overall welfare, in the presence of decentralized (firm-specific) unions all those results are reversed. Moreover, and most importantly, introducing managerial delegation makes unionization structure neutral in relation to consumer’s surplus and overall efficiency.

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Bibliographic Info

Paper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 07_12.

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Date of creation: Feb 2012
Date of revision:
Handle: RePEc:rim:rimwps:07_12

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Keywords: managerial delegation; unionized duopoly; union’s structure;

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References

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Cited by:
  1. Nicola Meccheri & Luciano Fanti, 2012. "Managerial delegation schemes in a duopoly with endogenous production costs: a comparison of sales and relative profit delegation under centralised unionisation," Discussion Papers 2012/137, Dipartimento di Scienze Economiche (DSE), University of Pisa, Pisa, Italy.

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